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Austria: Latest working life developments – Q3 2017

New legislation aimed at improving Austria’s labour market situation, a collective wage agreement to increase starting wages for qualified employees, and a new e-commerce apprenticeship are the main topics of interest in this article. This country update reports on the latest developments in working life in Austria in the third quarter of 2017.

New labour market initiatives come into force

Several regulations targeted at decreasing unemployment in Austria (which has steadily worsened since 2011 and only recently improved) came into force in the third quarter of 2017. On 1 July 2017, an employment initiative for the long-term unemployed over the age of 50 (Aktion 20,000) came into force as a pilot project in model regions in all nine federal states. It will be rolled out across the whole country on 1 January 2018, running until 30 June 2019, and is targeted at people who have been out of work for more than one year. It was, as previously reported, included in the federal government’s work programme on the suggestion of Austria’s Chancellor, Christian Kern, in early 2017 and will lead to the creation of 20,000 new (full-time) jobs in the public or non-profit sector (such as municipalities and communal areas, at regional and federal levels, in social enterprises, and non-governmental organisations). It will address a wide spectrum of professions and includes all qualification levels, from administrative jobs (such as those in schools) to caring for the elderly, and will be paid at the level of the relevant collective agreements. The jobs will be subsidised for a maximum of two years at a rate of up to 100% of gross pay plus a lump sum of 50% for non-wage costs. The Public Employment Service (AMS) is coordinating the initiative, including the recruitment process of eligible people. A total of €778 million has been earmarked for this measure, which is aimed to halve the number in long-term unemployment (there are currently around 50,000 long-term unemployed people in Austria).

Also, on 1 July, an employment bonus was introduced. This is an incentive for employers to create new jobs; if they do so, they will be refunded 50% of their non-wage labour costs for additional employees for a maximum of three years. Eligible workers are unemployed people registered with the AMS, graduates from Austrian educational institutions, people changing jobs and nationals of non-EU countries holding the Red-White-Red Card (for qualified employees). It does not, however, include new migrants who have not worked in Austria before. Furthermore, an Act on part-time work when returning to work (PDF) (Wiedereingliederungsteilzeitgesetz) was implemented in July, enabling people who have been on sick leave for at least six weeks to re-enter the labour market with reduced working hours. Because the arrangement involves part-time work, the reduction of working time will also result in a loss of income. Employees will be entitled to a degree of recompense via a ‘compensation payment’ (Wiedereingliederungsgeld) financed by the health insurance fund. The agreement is voluntary and dependent on an employer’s consent.

Collective bargaining developments

In the commerce sector, the Union of Salaried Private Sector Employees, Graphical Workers and Journalists (GPA-djp) and the commerce section of the Austrian Chamber of Commerce (WKO) agreed a collective agreement for over 400,000 white-collar workers in late July. It will comprise of a uniform wage table for the whole of Austria and raises the starting wage for qualified employees (with commercial training) to €1,600 (gross) per month, contributing towards a fairer wage distribution over an employee’s life course. Also in the commerce sector, a new apprenticeship was established in e-commerce. It will be implemented in mid-2018 and will complement the current commercial apprenticeship, providing formal qualifications in online sales distribution.

The third quarter also saw the start of the annual autumnal collective bargaining rounds, with the influential and pattern-setting metalworkers asking employers, on 20 September, for a 4% wage increase. A wide range of other sectoral bargaining rounds are to take place in the coming weeks and months.

Commentary

The next quarter will bring about important developments in the country. A vote in parliament on equal treatment for blue-collar and white-collar workers is expected on 12 October, which covers the harmonisation between the two groups on the reasons for being paid while off work, periods of notice and continued remuneration during sick leave. This has been a long-standing demand by the unions and is expected to be passed in parliament with votes by the Social Democratic Party (SPÖ), the far-right Freedom Party (FPÖ) and the Green Party (Die Grüne). The scheduled date for the vote comes just before the federal parliamentary elections on 15 October. Opinion polls have forecast a conservative/right-wing majority and losses for the Chancellor’s party, the SPÖ. It remains to be seen whether new power structures will have any impact on Austria’s long-established and powerful social partnership as, in their election campaigns, the conservative People Party’s (ÖVP) and FPÖ have announced that they would limit the social partners’ influence.